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TaxTMI 
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TaxTMI 
1971 (2) TMI 122
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....ugust 1955 it was decided to form a co-operative society and to transfer the assets and liabilities of this Bank to that society. The contention of the liquidator, on the other hand, is that this Bank was the joint family property of the petitioners who were members thereof. That question appears to have been assumed by the Deputy registrar and the Board of Revenue, without deciding it on evidence, in favour of the liquidator. However nothing much turns on that fact. The Co-operative Society was formed under the Madhya Bharat Co-operative Societies Act, 1954 (Act No. 9 of 1955) (hereinafter referred to as the Act) and it was registered on the 26th August, 1955. Thereafter, the assets and liabilities of the Gwalior Bank as on 30th september,....
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....e Bank, when making the advances, did not make proper enquiries at that time whether it was proper or not to advance the loans and whether they would be recoverable. There are again certain items of money withdrawn from the private Bank and paid to its constituents between the 56th August, 1955 when the Society was registered and 2nd October, 1955, when the Bank was handed over to the Co-operative Society, ( 2. ) After hearing the Directors, the Deputy Registrar, Co-operative Societies, who heard the applications passed an order imposing the liability upon the Directors, who are the petitioners, by his order dated 10th August, 1960. This is the first order challenged in this writ petition. Against this order an appeal was filed before the ....
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....pon the petitioners. ( 4. ) We have heard learned counsel for the parties and we have come to the coaclusion that there is force in this contention. Section 63 (1) of the Act is as follows:-- "63 (1) Where in the course of an audit under Section 27 or an inquiry under Section 52, or an inspection under Section 53 or the winding up of a society it appears that any person who has taken part in the organisation or management of the society or any past or present chairman, Secretary, Member of the Managing Committee or Officer of the society has misapplied or retained or become liable or accountable for any money or property of the society or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar may....
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....retained any money or property of the society; (3) become liable or accountable for any money or property of the society; or (4) been guilty of misfeasance or breach of trust in relation to the society. It any of these acts are proved, then the Registrar has the power to order repayment or restoration of the money or property or to direct contribution of "such sum to the assets of the society by way of compensation, in regard to the misapplication, retainer, misfeasance or breach of trust as the Registrar thinks just. " ( 5. ) It is obvious that the acts mentioned above either relate to the property of the society or are in relation to the Society. Any act done by the proprietor of the gwalior Bank before the Bank was transferred....
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....d would not have been in a position to say that it was a beneficiary in any sense. We are, therefore, of opinion that the Society got an interest in the properties of the Bank only on the date when it was transferred in favour of the Society on 2nd October, 1955. ( 6. ) While interpreting Section 63 of the Act it is also worth noting that large powers and powers not precisely defined have been given to the Registrar to impose liability for the payment of any amount and the only appeal provided against such an order is one to the State Government. There is no remedy available against such an order before any judicial tribunal. Such a power in the Registrar of Cooperative societies must necessarily be construed very strictly and he can be he....